Bangladesh Bank to let customers borrow up to Tk 10,000 through apps

Bank customers facing a cash crunch will soon be able to take out an instant loan of up to Tk 10,000 through their banking app to pay urgent bills or fees.

The loan carries no interest, though borrowers will pay a fee depending on the amount and repayment term, the central bank said on Sunday.

Bangladesh Bank has finalised a policy to launch the facility, called "e-payment credit".

The central bank noted that the initiative is designed to promote digital transactions while helping customers manage short-term cash shortages.

According to a circular issued on Sunday, customers can use the loan to pay different service bills, top up mobile phone balances, cover education fees, meet medical expenses, pay savings instalments and insurance premiums, cover travel costs, and settle taxes or government service fees.

The loan amount cannot be withdrawn as cash and must be used directly to pay bills or fees.

Customers can borrow between Tk 50 and Tk 10,000 against a service bill. They will have up to 30 days to repay the loan.

Applications can be made instantly through the banking app. 

The loan amount will not be credited to the customer's personal account or digital wallet.

Instead, payment must be made directly to the designated service provider or billing organisation through a digital transaction.

Loan terms will run for 7, 15 or 30 days. Bangladesh Bank will set a maximum fee based on the loan amount and repayment period.

For loans between Tk 50 and Tk 250, the maximum fees are Tk 3, Tk 4 and Tk 6 for the three terms, respectively.

For Tk 251 to Tk 500, the fees are Tk 5, Tk 8 and Tk 15. For Tk 501 to Tk 1,000, they are Tk 7, Tk 12 and Tk 20.

For Tk 1,001 to Tk 2,000, the fees are Tk 10, Tk 20 and Tk 30. For Tk 2,001 to Tk 3,000, they are Tk 15, Tk 30 and Tk 50.

For Tk 3,001 to Tk 5,000, the fees are Tk 20, Tk 40 and Tk 70. For Tk 5,001 to Tk 7,000, they are Tk 25, Tk 50 and Tk 90.

For the highest bracket, Tk 7,001 to Tk 10,000, the fees are Tk 35, Tk 70 and Tk 130.

To apply, customers must give digital consent, and their identity will be verified using their registered mobile number.

Banks will set their own eligibility criteria and may determine loan limits based on individual risk assessments.

The scheme will run on a trial basis for six months before being rolled out in full.